State job creation is slow, but steady

Published August 3, 2012 at 12:53 pm

By Don Heinzman, Guest Editorial

While the national unemployment rate hovers around 8.2 percent, Minnesota’s jobless rate in May was 5.6 percent.

The state unemployment rate for June remained the same, but some Minnesota employers were hiring, adding 7,200 jobs last month, according to figures released July 19 by the Minnesota Department of Employment and Economic Development.

The state unemployment rate was a seasonally adjusted 5.6 percent for the third straight month. Minnesota’s unemployment rate remains well below the U.S. unemployment rate of 8.2 percent. which also remained constant in June.

The gains made last month ended a streak of three consecutive months of job losses in the state, including May, which was revised from 900 jobs lost to 4,700 jobs lost. Over the past year, however, Minnesota has gained 35,000 jobs, a growth rate of 1.3 percent, which matches the U.S. rate during that period.

So the recovery continues, albeit, slow. One positive of the recovery story in this stubborn recession is the Federal Jobs Recovery Act, known as the stimulus funds that are maligned by many.

There are some critics who say it hasn’t created jobs and is a failure. In Minnesota, however, the stimulus funds are credited for saving 50,000 jobs.

In fact Tom Stinson, the state’s economist, has said the federal stimulus funds saved Minnesota from having a worse recession.

Minnesota received $5.9 billion in federal stimulus dollars, of which $1.1 billion was used to extend unemployment benefits in the state and $2 billion that was used to supplement the state’s Medicaid program.

In other words, the Tim Pawlenty Administration chose to spend $3.1 billion of the $5.9 billion for unemployment compensation and Medicaid, which funds health care for some Minnesotans.

There is some heartening news.

One of the latest drivers of job creation is agriculture, thanks in part to the surge in commodity and land prices.

Construction is on the rise and recently has been the fastest growing sector with 4,200 more jobs than a year ago.

Manufacturing is up 6,400 jobs over a year ago, according to the Department of Economic Development (DEED). This is due in part to an increase in exports, particularly to Asian countries. Another 1,100 jobs in the manufacturing sector were added last month.

Government jobs, however, are taking a hit, as school boards, city councils and county boards slash budgets by eliminating jobs, due in part to the loss of state local government aid (LGA). The government section of the economy recorded 4,400 new jobs in June, but for the year has lost 1,000 jobs.

The public sector shows a loss of 12,800 jobs over two years, according to DEED.

While the last three months of the economy have been sluggish, there have been almost 50,000 job openings, half of them part time, with health care and social assistance leading the way. The gains may be small, but they are positive steps for an economy that continues to plug along.

More people need to be hired in Minnesota, but compared to other states and the nation, Minnesota continues to have a lower unemployment rate than the national ranking.

Don Heinzman is a member of the ECM Editorial Board. ECM Publishers Inc. is the parent company of the Morrison County Record.